SUBSEQUENT PURCHASER CAN BE 'PROPER PARTY' IN SPECIFIC PERFORMANCE SUIT: SUPREME COURT:

SUBSEQUENT PURCHASER CAN BE 'PROPER PARTY' IN SPECIFIC PERFORMANCE SUIT: SUPREME COURT:

The Supreme Court has recently held that in a suit for specific performance of an agreement to sell, a subsequent purchaser may not qualify as a 'necessary party' but can be considered a 'proper party' if the adjudication of the dispute is likely to affect their rights.

This observation was made by a bench comprising Justices JB Pardiwala and R Mahadevan while hearing a case in which the Appellant, who was not originally a party to the suit, sought to be impleaded in the specific performance suit. The Appellant contended that his claim to the suit property, arising from a registered sale deed, necessitated his inclusion in the proceedings, as the outcome of the suit might impact his title to the property. Notably, the plaintiff did not oppose the Appellant’s inclusion as a party to the suit. However, the High Court, while exercising its jurisdiction under Article 227 of the Constitution, set aside the trial court's order that had allowed the Appellant to be impleaded.

Dissatisfied with the High Court's ruling, the Appellant approached the Supreme Court.

The Supreme Court, in an order authored by Justice Pardiwala, set aside the decision of the High Court. The Court observed that since the genuineness of the transaction involving the suit property was disputed and required examination during the trial, impleading the Appellant as a proper party would not prejudice the case. On the contrary, it would enable the court to effectively and comprehensively adjudicate all issues involved in the dispute.

“We may only say that insofar as the transaction between (Late) Mr. Sameer Ghosh and the original defendant no. 8 (appellant herein) is concerned, the same shall be a subject matter of trial. We do not express any opinion in this regard at this point of time. We may only say that the presence of the appellant in the suit is required for proper and effective adjudication of the dispute in the suit. We say so while giving additional regard to the fact that the original plaintiff has not opposed the impleadment of the original defendant no. 8 in his suit.”, the court observed.

Explaining the distinction between the necessary part and proper party, the Court said that “a necessary party is a person in whose absence no effective decree could be passed at all by the court. Whereas a proper party is one who though not a necessary party is a person whose presence would enable the court to effectively and adequately adjudicate upon all matters in dispute in the suit.”

Relying on the precedent set in Sumtibai v. Paras Finance Co. Regd. Partnership Firm Beawer (Raj.), reported in (2007) 10 SCC 82, the Court observed that if a third party demonstrates a reasonable semblance of title or interest in the property, they are entitled to seek impleadment in a suit for specific performance. The decision to add or remove parties under Order 1 Rule 10(2) of the Civil Procedure Code lies entirely within the discretion of the court. Accordingly, the Supreme Court allowed the appeal and reinstated the trial court’s order permitting the Appellant’s impleadment.